MIG Market Watch, April 1st, 2024
Market Comment

Mortgage bond prices finished the week near unchanged to slightly lower which kept rates generally in check. We saw very little daily movement through the week in contrast to the significant swings seen earlier this year. Stocks and bonds did not trade Friday and the shortened trading week factored into the calm. The data was very mixed. Home prices fell 0.1% as expected. Consumer confidence was 104.7 vs 107. Durable goods orders rose 1.4% vs 1.1%. Consumer sentiment was 79.4 vs 76.5. GDP rose 3.4% vs 3.2%. Weekly jobless claims were 210K vs 215K. Personal income rose 0.3% vs 0.4%. Spending was up 0.8% vs 0.5%. Core PCE inflation rose 0.3% as expected. Mortgage interest rates finished the week worse by 1/8 of a discount point.

Looking Ahead
Economic Indicator Release Date & Time Consensus Estimate Analysis
ISM Index Monday, April 1,
10:00 am, et
48.5 Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Construction Spending Monday, April 1,
10:00 am, et
Up 0.5% Low importance. An indication of economic strength. Significant weakness may lead to lower rates.
Factory Orders Tuesday, April 2,
10:00 am, et
Up 1.1% Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
ADP Employment Wednesday, April 3,
8:15 am, et
150K Important. An indication of employment. Weakness may bring lower rates.
Weekly Jobless Claims Thursday, April 4,
8:30 am, et
210K Important. An indication of employment. Higher claims may result in lower rates.
Trade Data Thursday, April 4,
8:30 am, et
$66.5B deficit Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
Employment Friday, April 5,
8:30 am, et
Payrolls +198K
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
Consumer Credit Friday, April 5,
3:00 pm, et
$20B Low importance. A significantly large increase may lead to lower mortgage interest rates.

Jobs and the Economy

Our economy in the US is driven by consumer spending, which accounts for almost 70% of Gross Domestic Product (GDP). Three driving forces, low unemployment, low commodity costs, and a solid housing market helped consumer spending and kept the economy moving in the right direction the past decade. It is simple; when a person has a job they can spend money. Low food and energy costs, items that must be purchased to keep a household running, increases money that could be used for other “luxury” items like TV’s and cars. Lastly, many households relied on home equity to enhance lifestyles, pay for college, or make major improvements to the house.

Rising food and energy prices have put pressure on consumers. Housing remains solid but higher mortgage rates continue to impact consumers too. The fear of the future also factors into things.

The abundance of significant data this week will provide insight into the current state of the economy, jobs, and trade. Be cautious as most releases have the potential to result in mortgage interest rate changes.